Nottingham tech boom outpaces lagging innovation cash

Nottingham's technology sector generates more startups and graduates than many larger UK cities but receives some of the lowest levels of national innovation funding per head, according to new analysis by community group Built in Notts.

The organisation has released a "Potential vs Investment Index" comparing 20 UK cities across Innovate UK funding, startup formation and graduate outcomes. The data places Nottingham eighth overall, behind Coventry, Cambridge, Sheffield, York, Manchester, Bristol and Belfast, despite relatively strong measures of entrepreneurial activity and skills.

Nottingham recorded 170 new tech businesses in the past year and produces more than 2,000 engineering and technology graduates annually. Built in Notts said this places the city among the more active urban centres in the index for both company creation and graduate output.

However, the city secured just £6.1 million in Innovate UK technology funding in 2024/25. That equates to around £19 per capita, well below the levels reported for several other regional hubs.

York, which ranked fourth in the index, received more than £45 million, or about £225 per capita. Cambridge, which placed second, secured £28 million, equivalent to £188 per head. Both cities also benefit from consistently high public investment and research intensity.

Funding gap

The Built in Notts index highlights what it describes as a "potential versus investment" gap in Nottingham. The city's startup formation and graduate employment outcomes scored highly, while its Innovate UK funding intensity ranked among the lowest in the top 10.

Coventry topped the 2025 table with an index score of 260. Built in Notts attributed this to strong Innovate UK funding across two years and a high number of supported businesses relative to the population.

Sheffield, in third place with a score of 211, combined solid public funding with a steady flow of new tech companies. Manchester, ranked fifth on 196, reported the highest number of new technology company formations at 795 in 2024/25 and strong graduate output, though its funding levels were described as moderate for its size.

Nottingham's score of 184 placed it ahead of Oxford on 177 and Birmingham on 162. Oxford benefits from a large graduate talent pool and regular startup formation, but receives less Innovate UK funding than some other research-focused cities. Birmingham has an extensive talent base and business scale, but ranks lowest in per-capita Innovate UK support among the top 10.

Local response

Built in Notts launched this year as a grassroots initiative that seeks to connect founders, investors and innovators in the city. It runs weekly meetups, networking events and workshops aimed at strengthening local links across the tech community.

Founder Martin Sandhu said the city's performance reflects long-standing entrepreneurial culture.

"Nottingham has always been a city built on hustle and heart," said Martin Sandhu, Founder of Built in Notts. "We've got the talent and the ideas, but we need to build a stronger community to create a centre of gravity to enable investment. At the moment the level of investment doesn't reflect the potential of the city and region. If we want to keep our best graduates here and help startups scale, we need to close the gap between potential and funding. Nottingham's story isn't about what's missing, it's about what's waiting to happen if we get this right."

The index is designed to identify UK cities that generate strong startup and skills outcomes relative to the public research and innovation funding they receive. It uses Innovate UK award data from 2023/24 and 2024/25, Companies House records on new technology firms and dissolution rates, and higher education statistics on engineering and technology graduates who enter work or further study.

Each metric was standardised into a 0-100 score. Cities were then ranked on a combined measure of public investment inputs and outputs such as startup volumes, graduate talent and business survival.

Sandhu said the results underline the city's reliance on founders and graduates rather than large-scale national backing. "Nottingham's results paint a clear picture of a city driven by self-starting founders, skilled graduates, and collaboration, but one that remains underfunded compared to its output and capability. If Nottingham's startup scene can achieve this much without serious funding, imagine what it could do with it. Built in Notts is about establishing Nottingham as a recognised hub of innovation where startups thrive and a community of change-makers builds a brighter future." added Sandhu.

Founders' experience

Local entrepreneurs say the numbers reflect their own experience of building businesses in the city. Nottingham has seen a series of software and digital firms scale over the past decade while operating at some distance from London's investor networks.

Jordan Adams, a founder and investor who addressed a Built in Notts event on regional scaling, said his own growth story underlines the city's strengths.

"I started my first company in Nottingham, and what began as a small local operation grew into a global business. That journey was built on the talent, mindset and grit this city produces. Nottingham has always had the brains and the drive - what it hasn't always had is the same access to funding and networks that bigger cities enjoy. This research shows the potential is here; it just needs backing at the same scale." said Adams.

Investor and founder Will Mellors-Blair said community-based efforts can link that local talent with capital and industry.

"Built in Notts is exactly what this city needs - a movement that connects and amplifies the talent already here. The creativity and resilience in Nottingham rivals anywhere in the world, but it needs the right infrastructure and collaboration to thrive. A new generation of founders is emerging, and if we can build the right bridges between students, startups, investors and industry, Nottingham's potential won't just be recognised - it will be realised." said Mellors-Blair.

Built in Notts plans further research and events that focus on regional investment flows and the performance of Nottingham's early-stage companies over time.